Tuesday, January 10, 2017

Today's Links

1--Koch Brothers stops regulatory protections for consumers

Under REINS Act, If either branch of Congress does not approve any covered rule within 70 legislative days, the rule becomes null and void and cannot be re-issued. This effectively gives one chamber of Congress veto power over any new significant public health and safety protection, no matter how non-controversial or sensible it may be.

With the power to block crucial standards resting in the hands of just one chamber of Congress, the REINS Act would give enormous power to deep-pocketed, powerful lobbyists in Washington who favor the status quo. If there is one thing corporate lobbyists are good at, it’s stopping Congress from getting things done.
With the REINS Act in place, Congressional gridlock would create a permanent system of regulatory stagnation and obsolescence that is unable to protect our safety, health and wellbeing in a rapidly changing world…

2--Best Buy’s “Geek Squad” reports to FBI??

Did you know that Best Buy’s central computer repair facility — their so-called “Geek Squad” — contains at least three employees who are also regular informers for the FBI? And that these employees routinely search through computers and other devices that Best Buy customers send in for repair? And when they find something they think the FBI would be interested in, they turn over the information for rewards of up to $500?
That’s a sideline business you probably didn’t imagine existed — outside of the old Soviet Union or communist East Germany.

3--Summers Warns of Financial-Crisis Risk From Trump Economic Plans

“The deregulation in some areas like finance is hugely dangerous,” Summers said Sunday in an interview on Fox News Channel. “Who wants to go back to the era of predatory lending? Who wants to go back to the era of vastly over-levered banks?”

4--A protracted economic decline results in poor wage growth--Why Wages Have Lagged Behind the Global Jobs Recovery --Companies have been hiring, but wage growth until recently hasn’t kept pace

Wage growth only recently appears to have picked up in the U.S. Average hourly earnings rose 2.9% in December from a year earlier, greater than the 2% average that prevailed during much of the expansion. Still, it’s too early to say if that will be sustained and other U.S. wage measures are less robust.
Wages in 22 advanced economies grew by an average 3.7% a year between 1995 and 2007, but by less than 2% a year between 2008 and 2016, Oxford Economics calculates....

While jobs were lost primarily in the construction and manufacturing sectors, they have been added in the services sector, says Stefano Scarpetta, an economist with the Organization for Economic Cooperation and Development, a think tank for advanced economies. In the euro area, nearly all of the 3.2 million positions created since the recovery were service-sector jobs, primarily in trade, transport and business services, according to the ECB. Many of these positions tend to be harder to substitute with machines, and don’t pay so well.
Second, workers’ bargaining power may have been eroded due to general economic uncertainty, labor-market reforms and intensifying global competition from China and elsewhere...

Public-sector pay has also been squeezed as governments tightened their belts, pulling down average wages and perhaps weighing on private-sector pay by proxy

5--Barack Obama was a savior – of a drowning ruling class.

Barack Obama was a savior – of a drowning ruling class. Under his administration, Wall Street rose from near-death to new heights of speculative frenzy, awash in capital brutally extracted from the vanishing assets and past and future earnings of the vast majority of the population, or gifted in the form of trillions in free money at corporate-only Federal Reserve windows. The Big Casino, reduced to a rubble of its own contradictions in 2008, ushered in the New Year just shy of the once-fantastical 20,000 mark. Analysts credited Donald Trump’s victory for the bankers’ bacchanal, but it was Obama who made the party possible by overseeing the restructuring of the U.S. economy to accommodate and encourage the hyper-consolidation of capital -- another way to describe the deliberate deepening of economic (and political) inequality. Having accomplished the mission assigned him by Wall Street in return for record-breaking contributions to his first campaign, Obama is said to be angling for a hot-money squat in Silicon Valley, the super-rich sector that was most supportive of his presidency. ...

A new study by economists at Princeton and Harvard universities shows that an astounding 94 percent of the 10 million jobs created during the First Black President’s two terms in office were ObamaJobs. This sub-sector of employment increased by almost half under Obama, from 10.7% of the working population to 15.8%.

According to the study, one million fewer people are working under any kind of formal employment than before the Great Recession. The researchers also calculate that Obama’s claim of creating 15 million new jobs is off by 5 million.

6--The Fed retaliates against Trump--Fed official says strong jobs data rule out fiscal boost 

Action on budget deficit would be more helpful, says San Francisco chief

7--Credit Check--This is getting serious

8--Wall Street looks to control China markets-- Opening Up China's Markets Won't Be Straightforward

While China loosened restrictions on its interbank bond market and relaxed rules for offshore investors trading stocks, it also saw $762 billion head overseas in the first 11 months of last year, according to Bloomberg Intelligence estimates, as investors sought safety in foreign assets...

China’s regulators have indicated that this year foreigners might be allowed to access commodity futures and bond derivatives, while MSCI will again consider adding mainland stocks. But concerns remain about how open China’s markets will be, especially on the issue of taking assets out of the country. The contrast highlights the tension authorities face between inviting more investment while keeping control of the financial sector...

Among last year’s steps, Beijing lifted almost all quotas on China’s interbank bond market and scrapped some constraints under the Qualified Foreign Institutional Investor program, which governs how offshore funds invest in mainland markets. The Shenzhen-Hong Kong stock exchange link, the second between the mainland and the former British colony, opened in December.
Expectations then rose as an official with the People’s Bank of China said the central bank is committed to further opening the interbank market, including giving foreign investors access to foreign-exchange and interest-rate derivatives to hedge risks, and expanding trading hours.

9-- Larry Summers: Trump's like a Latin American-type strongman and postelection rally's a 'sugar high'

Consumer confidence at 15 year high.. Small business optimism at 12 years highs .Stock markets at record highs ...

The boost in the stock market and the dollar on optimism about the economy since Donald Trump was elected president won't last, former Clinton Treasury Secretary Larry Summers predicted Tuesday.

"When regimes that were in some ways similar — highly nationalist, highly interventionist with a bit of an authoritarian aspect — have come to power in Latin America, it was often a very good economic period with a strong currency before the thing fell apart," the economist said on CNBC's"Squawk Box."

10--Disgraceful lies’: MP blasts Pentagon chief’s statement on Russian role in fighting ISIS

11--Insider leaks, not Russian hacking’: CIA & MI5 veterans discuss ODNI report on RT

Former CIA agent Larry Johnson told RT that what had struck him about the report the most is that it contained “not one shred of evidence” to back up the sprawling accusations against the Russian government.
“At some point in that process, we should have seen either an electronic or human source that said Vladimir Putin or someone in his government had directed the cyber command in Russia to start a program or a plan… There is not one source of information in that report,” he said, arguing that such negligence in failing to provide a single source indicates that the so-called “hacks” were instead the result of internal leaks....

Machon believes that if “indeed there had been hacking, there would be traces that could be found,” she said, citing estimates by William Binney, a former NSA intelligence official turned whistleblower.
“If… those traces have not been found, have not been reported, without any particular scientific methodology behind it – it does make the report very evidence-light,” she stressed

12-- WA Post wants to remove Trump in a constitutional coup

The Politics of delusion

13--Brilliant summary of Obama's legacy: Obama's legacy of war, repression and inequality

Then there is the man himself. What is most striking is Obama’s emptiness. From his first major speech, at the 2004 Democratic National Convention, the media has hailed Obama as a great orator. Yet over the span of 12 years in political office at the federal level, including eight in the White House, Obama leaves behind not a single sentence from a speech or interview that will be remembered.

Everything about Obama, who came into office having been named “Marketer of the Year,” is false and contrived. The only thing he consistently conveys is indifference, a strange remoteness, a man without qualities.

The personality is related to the function. More than anything else, Obama has been the president of the intelligence agencies. His political convictions appear to extend no further than his CIA briefing books. To those who care to look more closely into the background, there always seemed to be hands guiding his way to the White House.

For the ruling class, Obama’s particular function was to fuse in his person and his administration identity politics with the absolute domination of Wall Street and the military-intelligence apparatus. The “change” Obama was to represent was in the color of his skin, not the content of his policies.
The nominally liberal and pseudo-left organizations of the upper-middle class that surround the Democratic Party hailed his election as a “transformative” event, seizing upon the elevation of an African-American as an opportunity to abandon their oppositional pretenses. However, his tenure has merely demonstrated that it is class, not race, that is the decisive social category

Amidst all the commentary on Obama’s “progressive” legacy, no one seems capable of explaining why it is that eight years of the Obama White House paved the way for the election of Donald Trump. Yet the bitter realities of social life, the widespread anger and disappointment, led to a collapse of the Democratic Party vote amidst a general feeling of disillusionment with the entire political establishment.

Obama now bequeaths to the world a ferocious conflict between two right-wing factions of the ruling class: The Trump administration, which is preparing an authoritarian and militarist government of the oligarchy, and its critics, furious that he is reluctant, for the present, to proceed with their preparations to wage war against Russia.

The record of the Obama administration and the character of the individual himself speak, in the end, to the structure of American politics—an ossified and reactionary political establishment that lacks any broad base of support, standing atop a cauldron of seething social tensions. The true legacy of Obama is the deepening of the crisis of American capitalism and the emergence of a new period of social and revolutionary struggles.

14--Washington worried about Turkey-Russo alliance

A Monday article in the New York Times, which has assumed a leading role in the anti-Russian propaganda campaign, noted the increased cooperation between Moscow and Ankara with concern. “The deepening ties threaten to marginalize the United States in the struggle to shape Syria’s ultimate fate,” the newspaper warned, before going on to point out that Turkey’s recent offensive began without coordination with the United States and without assistance from US air strikes. The paper suggested that the Kremlin had decided to accommodate itself to Turkish advances in northern Syria, provided that Ankara does not openly confront the Assad regime.

15--Berlin terror attack suspect was well known to German intelligence agencies

16--As Dow Approaches 20000: Has This Rally Just Begun?

The stock rally ranks among the least-beloved in history, traders and analysts say. The technology bust and the financial meltdown taught individuals to shy away from stocks and to embrace bonds and cash. Investors poured $381 billion into bond mutual and exchange-traded funds between the start of 2014 and October, according to EPFR Global. Over the same span, they pulled a net $16 billion from stock funds.
It is a strategy that many have pursued to their detriment. The Dow has returned 274%, including price gains and dividends, since its 2009 bottom. The 10-year​U.S. Treasury note has returned 33% over the same span. Now, with many on Wall Street raising their estimates for U.S. economic growth in coming years following the surprise election of Donald Trump, swapping out of bonds for stocks is an idea that is coming up more in conversation...

Roughly 46% of investors were bullish as of Jan. 4, according to the weekly survey by the American Association of Individual Investors. That is above the long-term average of 38% but far below the peaks of 75% reached in January 2000 and 58% in 2007. Investors often use the survey as a contrarian indicator, selling when bullish sentiment reaches highs and buying when bearishness spikes.

17--Making Housing Sane Again--Will Trump protect taxpayers or Fannie and Freddie shareholders?

The hedgies that own Fan and Fred shares talk about liberating the companies from Washington, but what they really want is to liberate for themselves the profits that flow from a duopoly backed by taxpayers.
And Mr. Mnuchin, the Goldman Sachs alum, seems to be speaking their language. “It makes no sense that these are owned by the government and have been controlled by the government for as long as they have,” Mr. Mnuchin told Fox Business in November. “So let me just be clear—we’ll make sure that when they’re restructured they’re absolutely safe and they don’t get taken over again. But we got to get them out of government control.”

18--The jihad against Richard Cordray

19--Summers Warns of Financial-Crisis Risk From Trump Economic Plans

Former U.S. Treasury Secretary Lawrence Summers attacked the policy proposals of Donald Trump on several fronts, saying the president-elect’s plans for deregulation were setting the stage for the next financial crisis.
“The deregulation in some areas like finance is hugely dangerous,” Summers said Sunday in an interview on Fox News Channel. “Who wants to go back to the era of predatory lending? Who wants to go back to the era of vastly over-levered banks?”

20--Obama’s trail of disasters

As a political leader, Obama has been a disaster for his party. Since his inauguration in 2009, roughly 1,100 elected Democrats nationwide have been ousted by Republicans. Democrats lost their majorities in the US House and Senate. They now hold just 18 of the 50 governorships, and only 31 of the nation’s 99 state legislative chambers. After eight years under Obama, the GOP is stronger than at any time since the 1920s, and the outgoing president’s party is in tatters.

In almost every respect, Obama leaves behind a trail of failure and disappointment...

In 2010, two years after electing him president, voters trounced Obama’s party, handing Democrats the biggest midterm losses in 72 years. Obama was reelected in 2012, but by nearly 4 million fewer votes than in his first election, making him the only president ever to win a second term with shrunken margins in both the popular and electoral vote...

The economy. Obama took office during a painful recession and (with Congress’s help) made it even worse. Historically, the deeper a recession, the more robust the recovery that follows, but the economy’s rebound under Obama was the worst in seven decades. Annual GDP growth since the recession ended has averaged a feeble 2.1 percent, by far the puniest economic performance of any president since World War II. Obama spent more public funds on “stimulus” than all previous stimulus programs combined, with wretched, counterproductive results. On his watch, millions of additional Americans fell below the poverty line. The number of food stamp recipients soared. The national debt doubled to an incredible $20 trillion. According to the Pew Research Center, the share of young adults (18- to 34-year-olds) living in their parents’ homes is the highest it has been since the Great Depression.

In 2008, when Obama was first elected president, 63 percent of Americans considered themselves middle class. Seven years later, only 51 percent still felt the same way. Obama argues energetically that his economic policies have delivered prosperity and employment. Countless people disagree — including many who aren’t Republican.....

Health care. The Affordable Care Act should never have been enacted. Survey after survey confirmed that it lacked majority support, and only through hard-knuckled, party-line maneuvering was the wrenching health-care overhaul rammed through Congress. But Obama was certain the measure would win public support, because of three promises he made over and over: that the law would extend health insurance to the 47 million uninsured, that it would significantly reduce health insurance costs, and that Americans who had health plans or doctors they liked could keep them.

But Obamacare has been a fiasco. At least 27 million Americans are still without health insurance, and many of those who are newly insured have simply been added to the Medicaid rolls. Far from reducing costs, Obamacare sent premiums and deductibles skyrocketing. Insurance companies, having suffered billions of dollars in losses on the Obamacare exchanges, have pulled out from many of them, leaving consumers in much of the country with few or no options. And the administration, it transpired, knew all along that millions of Americans would lose their medical plans once the law took effect. The deception was so egregious that in December 2013, PolitiFact dubbed “If you like your health plan, you can keep it” as its “Lie of the Year.”

Foreign policy. The 44th president came to office vowing not to repeat the foreign-policy mistakes of his predecessor. His own were exponentially worse.

According to Gallup, Obama became the most polarizing president in modern history..

Obama’s accession in 2008 as the nation’s first elected black president was an achievement that even Republicans and conservatives could cheer. It marked a moment of hope and transformation; it genuinely did change America for the better.
It was also the high point of Obama’s presidency. What followed, alas, was eight long years of disenchantment and incompetence. Our world today is more dangerous, our country more divided, our national mood more toxic. In a few days, Donald Trump will become the 45th president of the United States. Behold the legacy of the 44th

21--Putin's influence campaign??? CIA tests the depths of stupidity

The analysts stressed that their assessment of attribution of activities in cyberspace is not a "simple statement of who conducted an operation, but rather a series of judgments that describe whether it was an isolated incident, who was the likely perpetrator, that perpetrator’s possible motivations, and whether a foreign government had a role in ordering or leading the operation."...

The analysis came to a conclusion: "We assess Russian President Vladimir Putin ordered an influence campaign in 2016 aimed at the US presidential election. Russia’s goals were to undermine public faith in the US democratic process, denigrate Secretary Clinton, and harm her electability and potential presidency. We further assess Putin and the Russian Government developed a clear preference for President-elect Trump. We have high confidence in these judgments."

"Moscow’s influence campaign followed a Russian messaging strategy that blends covert intelligence operations – such as cyber activity – with overt efforts by Russian Government agencies, state-funded media, third-party intermediaries, and paid social media users or 'trolls,'" the report read.

22--Trump quotes:

The establishment has trillions of dollars at stake in this election. Those who control the levers of power in Washington and the global special interests they partner with, don’t have your good in mind. The political establishment that is trying to stop us is the same group responsible for our disastrous trade deals, massive illegal immigration and economic and foreign policies that have bled our country dry.

“It’s a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities. The only thing that can stop this corrupt machine is you. The only force strong enough to save our country is us. The only people brave enough to vote out this corrupt establishment is you, the American people.”

23--Trumponomics-- Analysts see little new growth but big perks for Wall Street

Treasury strategists see the Trump trade as an important theme, now that the 10-year yield has retraced from its post election high of 2.64 percent on Dec. 15 to 2.36 percent Monday. On Tuesday, the yield was barely changed at 2.37 percent.
"Obviously we had strong corporate issuance. To start the year with that kind of a bang is very unusual. It's weighing on yields. The 10-year was at 1.60 before the election. Even at 2.35, it's 75 basis points higher. A lot of this is based on forward expectations of the new administration's policy," said Boris Rjavinski, rate strategist at Wells Fargo. "Some of the policies could be implemented very quickly. Some could involve protracted fights." ...

Economists have not built much extra growth into their 2017 forecasts from the Trump programs, though markets were lifted in a "reflation" trade on the hope that the economy would be boosted. The overhaul of corporate taxes was a big factor behind the optimism that has driven the Dow about 9 percent higher since the election, and there was hope that Congress and the White House would agree to a plan this year...

Financial stocks have led the market higher since Election Day, with about a 17 percent gain. The S&P financial sector slid 0.8 percent Monday. Hogan said the pattern was also the same in what was a broader reflation trade.
Stocks opened mixed but moved higher Tuesday, with the Dow and the S&P 500 reversing some of Monday's losses. The Nasdaq, after closing at a record Monday, was higher again, helped by Illumina and Intel.

24-- Yellen to Trump: Any attempt to fix the economy will be sabotaged with higher rates-- A Trump Economic Boom? The Fed May Stand in the Way

Even if Mr. Trump is right, however, the Fed does not want 4 percent growth....

For years, Fed officials urged Congress to increase fiscal spending. Now, Mr. Trump is promising to do just that — and the Fed has concluded that it is too late....

The tension between fiscal and monetary policy is likely to unfold in slow motion.
Mr. Trump has promised to press for rapid changes in government policy, but Congress is not built for speed. A similar effort to cut taxes at the beginning of the George W. Bush administration, for example, was signed into law on June 7, 2001. The impact of new cuts, and any increase in infrastructure spending that Mr. Trump can persuade dubious Republicans to embrace, would be felt mostly in future years.....

“The Fed and markets in general will ultimately wash out any benefit....The economy under President Trump ultimately will be diminished.”

Investors in financial markets, and those predicting faster economic growth in 2017, would do well to remember the famous words that William McChesney Martin Jr., the former Federal Reserve chairman, uttered way back in 1955: The Fed’s job is to remove the punch bowl just as the party gets going.

President-elect Donald J. Trump’s promises to cut taxes and regulation and to increase spending on infrastructure and defense have convinced many that a sugar high in the near term will goose the economy. But Fed officials say the economy is already expanding at something close to its maximum sustainable pace, meaning faster growth would drive inflation toward unwelcome levels.
To avoid overheating, the Fed could respond by raising interest rates more quickly. The more Mr. Trump stimulates growth, the faster the Fed is likely to increase rates.

“I guess I would argue that I think people have gotten a bit ahead of themselves about what a Trump presidency would mean,” said Lewis Alexander, chief United States economist at Nomura. “If we have a big stimulus, the logical thing for the Fed to do is to raise rates faster. There isn’t a whole heck of a lot of scope to just let the economy run under those circumstances. There’s a big question about whether fiscal stimulus under Trump just leads to higher interest rates.”

“Our No. 1 priority is going to be the economy, get back to 3 to 4 percent growth,” Steven Mnuchin, Mr. Trump’s pick to serve as Treasury secretary, said last month.
Many economists regard such growth predictions as fanciful; the economy has been mired in an extended period of slow growth and the reasons, including an aging population and a dearth of innovation, are unlikely to change quickly. Some think Mr. Trump is more likely to push the economy into recession than to catalyze a new boom....

Even if Mr. Trump is right, however, the Fed does not want 4 percent growth.
The central bank’s outlook has become increasingly gloomy. Officials estimated in September that annual growth of 1.8 percent was the maximum sustainable pace, and they predicted growth would not exceed 2 percent in the next three years. They will update those forecasts Wednesday, but large shifts are unlikely.
Fed officials also are increasingly convinced that steady job growth has substantially eliminated the post-recession backlog of people seeking work. The unemployment rate fell to 4.6 percent in November, a level the Fed regards as healthy.
For years, Fed officials urged Congress to increase fiscal spending. Now, Mr. Trump is promising to do just that — and the Fed has concluded that it is too late.

Stanley Fischer, the Fed’s vice chairman, said last month the Fed might still benefit from fiscal stimulus because it could raise rates more quickly. That would increase the Fed’s ability to respond to future downturns by reducing interest rates.
But such gains would come at real cost: A fiscal stimulus would increase the federal government’s debt burden, which already is at a high level by historical standards, reducing the room for a fiscal response to a future downturn. Janet L. Yellen, the Fed’s chairwoman, urged Congress last month to be mindful that the government is already on the hook for more spending as baby boomers age into retirement.
“With the debt-to-G.D.P. ratio at around 77 percent, there’s not a lot of fiscal space, should a shock to the economy occur, an adverse shock, that did require fiscal stimulus,” she said.

25--Yellen: Trump plan may stoke inflation, debt

26--Janet Yellen on Fiscal Stimulus, Then and Now

One big question facing Federal Reserve Chairwoman Janet Yellen today: Should the central bank weigh in on the not-yet-definite plans by President-elect Donald Trump and the new Republican Congress to enact fiscal stimulus next year in the form of tax cuts and, potentially, an infrastructure-spending package?
As it happens, exactly six years ago -- on Dec. 14, 2010 -- the Federal Open Market Committee held its final meeting of 2010. The issue of fiscal stimulus came up then, too: President Barack Obama and Congress agreed that month to extend Bush-era tax cuts for two years and make other changes to the tax code.

At that meeting, Ms. Yellen, the Fed's vice chairwoman, called the legislation "a positive for the near-term outlook," according to a transcript released early this year following the standard five-year delay. "It should boost growth somewhat during the coming year and diminish the risk that fiscal drag could tip the economy back into recession."

But when she testified before the Joint Economic Committee last month, Ms. Yellen sounded less enthusiastic about the idea of short-term economic stimulus. “The economy is operating relatively close to full employment at this point,” she told lawmakers, which would suggest less need for measures aimed at stimulating demand.

Instead, she urged elected officials to focus on policies that would boost long-sluggish labor productivity growth, a key ingredient in bolstering the long-run economic outlook. Don’t be surprised if she returns to that theme if the subject comes up during the press conference segment of today’s festivities


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